Aircraft: A321
Phase of flight: Takeoff / Launch
Anomaly: Aircraft Equipment Problem Critical; Deviation / Discrepancy - Procedural Published Material / Policy; Flight Deck / Cabin / Aircraft Event Smoke / Fire / Fumes / Odor

TOGA APU bleed on config 2. Cleared for takeoff; at about power stable and 1.5 EPR Engine 2 FAIL message (no fire indication) and single chime. Notified ATC of reject and needed to clear runway. Started ECAM procedures; at the same time another airline notified us over air that we had a fire on our number 2 engine. We then proceeded to extinguish fire with push button and squib. After finishing up procedure and coordination with CFR to make sure no fire was present we set up to be towed back to gate with no further incident.Apparently; Airbus is having issues with this config for takeoff. TOGA APU bleed on.Coordination with Airbus on reliable and safe max effort takeoff configurations. Day 3 of a 3-day; early departure; last leg home. Gate XXX; short taxi to runway XXR. Allowed the engines to warm up for three minutes while on the ramp to get the five minutes required before takeoff. Winds were reported 280 degrees to approx 300 degrees. From previous experiences from flying the Airbus in and out of ZZZ; the winds can switch to a tailwind component very quickly when they use runway XXL/R for departure; so I expected a potential tailwind.We were cleared to line up and wait on runway XXR. The aircraft was lined up with the center line and the parking break was set. Control was then given to the FO as we awaited takeoff clearance. Once it was received and we read it back; we immediately experienced a single chime; which normally would indicate that perhaps the airplane was not configured for takeoff. Upon looking at the ECAM; we had an ENG 2 FAIL ECAM alert. Normally when we encounter ENG FAILs in the simulator; we are presented with a master warning and three chimes. This was a singular chime. I immediately told the FO we needed to clear the runway as there was a 90 degree taxiway (1) on the right side of the runway just 50 yards or so from us. FO advised tower we needed to clear for a warning.At this point I initially thought this might be a false warning. There was definitely a surprise factor to all of this. As we were clearing the runway (right turn) at taxiway 1; I glanced at the EGT and it was red. At the same time; another airplane that was getting ready to take the active runway said he saw fire coming out of out right engine. I stopped the aircraft on taxiway 1. I had the FO call for the CFR vehicles. The FO wanted to run the ECAM procedure; but I had him check the Quick Reference Card first as I remembered there was either a quick action or ECAM exception procedure that needed to be run prior to executing the ECAM procedure. The FO started to look that up... I called back to the cabin and asked the flight attendants to check to see if there was any smoke in the cabin or any sign of fire coming from the engine. The answer was that there was no evidence of fire or smoke; from the #3 or #4 FA. When I returned to the FO; he said the QRC procedure he found was for an ENG FIRE on the ground. After considering a possible evacuation; my focus shifted to getting the engine shut down. Since we had no indication of a fire from the cockpit (other than high EGT) nor any evidence from the cabin; we ran the ECAM ENG FAIL procedure and elected to discharge a fire bottle into the #2 engine. I made a PA to the passengers telling them we exited the runway due to an alert we received in the cockpit and to expect some emergency vehicles come around the aircraft. The fire trucks were not present at this point; so we asked the other airplane if they could see any evidence of fire. They couldn't see from their vantage point; so I taxied the aircraft South on taxiway 2 to taxiway 3 (50 yards?) to see if they could see any evidence of continued fire. They still could not see; so I stopped the aircraft at taxiway 3 and waited for CFR to show up. No fire indications in the cockpit; such as aural fire warning or ENG FIRE ECAM; other than the excessive EGT with the ENG FAIL ECAM.Once CFR arrived; communications were hampered as they were not on a dedicated frequency yet. I queried the tower and they gave us the right frequency to be on; when they arrived. CFR scanned the aircraft and did not find any hot spots. At this point; we had finished the ECAM procedure and were looking for any follow-up procedures (which is the next step in Airbus; non-normal methodology). The FO couldn't find them. They used to be in the QRH and were on [specific] paper... easy to find. Since a previous; major QRH revision; they are no longer on [specific] pages but are found within the QRH itself. I told the FO not to worry about finding them... that much of the material was not going to be applicable. I redirected our focus back to the STATUS page so we could discuss the current situation of the airplane. The big thing was that we had no nose wheel steering; so we summoned ops to get us a tug and advised CFR to follow us under tow. It took an inordinate amount of time to get a tug out to us (maybe 30 minutes or more); but seemed like hours. Made several PA's explaining that we were still waiting on our tug.Eventually towed back to the gate. Maintenance met the aircraft and asked about EGTs; duration; and the fire bottle status. I told them I remembered seeing an EGT of 669 at some point... maybe for 30 to 60 seconds. AML entry was made indicating all of this.When all of this was occurring during a short amount of time; I originally thought that maybe this was a false alert (only a single chime). After exiting the runway and realizing the extent of the emergency; I thought that perhaps we had the presence of flames due to a compressor stall; exacerbated by a wind that may have shifted to a tailwind.After returning to the gate; I was in contact with the Fleet Captain... who asked if the APU was ON for takeoff. I replied that it was. In Airbus world; you can do a Max power takeoff and run the packs from the APU; freeing-up the engines; giving you a little more power for takeoff. That was the case this morning. The Fleet Captain indicated that the ENG FAIL ECAM was caused by having the APU bleed ON. Apparently; this causes back pressure on the engine bleed and is a known issue. Tech Ops is increasing ground idle to prevent thisAfter speaking to the Fleet Captain; he mentioned that the QRC procedure (requiring completion before doing the ECAM alert) entitled ENG FIRE on GROUND is a procedure used when there is no electrical power to the aircraft. It is a procedure that is to be used in that situation. Perhaps I misunderstood him as our conversation occurred after the adrenaline started settling down a bit; but maybe it needs to be explained to the flight crews (the correct use of that particular QRC procedure).Also; the FO had difficulty in finding the ECAM follow-up procedures; to the point where I said we need to move to the final step of assessing the STATUS (page) of the airplane.Finally; communication from the tower on how to communicate with CFR/ARFF when they arrived could; be improved upon. In retrospect though; we never said the word 'emergency' to them. My instructions to the FO were to get the trucks rolling now... not very clear perhaps and maybe was a factor in the initial comm problems with CFR.Advised the Duty Chief that we were done flying for the day. The adrenal rush was subsiding and he was very helpful in accomplishing that for us. A321 flight crew reported after taking the runway for takeoff and setting power; they received an ECAM message ENG 2 FAIL and rejected the takeoff; securing the engine and discharging the engine fire bottle. They required a tow back to the gate due to loss of nose wheel steering.